More than 1.2 million prime jobs in Tennessee will be attributed to small businesses in 2022, according to the US Small Business Office of Advocacy. If you're a new business owner or a veteran entrepreneur, business insurance is essential for your financial security.
In 2018, Tennessee reported over 72,900 non-fatal workplace injuries, with over 83 of them from private companies. Lack of staff, whether because of injury or otherwise, could lead to reduced productivity and profits for your company.
Business Insurance in Tennessee protects your business from complications stemming from the following:
- Lawsuits related to third-party injuries and property damage.
- Automobile accidents.
- Accusations of professional negligence
- Employee Injuries
Tennessee companies with five employees must have a Worker's Compensation Insurance policy. However, firms in the construction market and mining industries must have coverage if they have even one employee.
Other business insurance, like general liability insurance and professional liability coverage, isn’t required by law in Tennessee. Still, it's a good idea to have general liability in place if an accident occurs. A prospective client or landlord will require general liability coverage as part of a business contract.
Some examples of companies getting insurance in Tennessee are:
- Architecture & Engineering
- Building Maintenance
- Healthcare practitioners
- Construction contractors
- Personal services
Types of Commercial Insurance Offered in Tennessee
As a Tennessee business owner, you should consider several insurance policies for financial and legal reasons. Some of the recommended ones are:
General Liability Insurance
General liability is essential coverage for businesses and organizations in Tennessee. It protects against third-party bodily injuries or property damage caused by the company during business operations.
General liability insurance may be paired with commercial property coverage into a business owners policy (BOP), but it's also sold as a monoline policy to hundreds of contractors and those companies that don’t have assets. Whether you operate as a contractor or small business owner, you should have a business liability insurance policy to ensure your company has a safety net.
A mishap may result in a lawsuit you might not be prepared to deal with. One effective tactic to prevent this is to have sufficient limits on your liability coverage that properly reflect your business’s level of exposure. Some companies or clients may require you to purchase a certain amount of general liability when you intend to work with them.
Business Owners Policy
A BOP is a policy that combines property and liability insurance into one package, designed for small to medium-sized companies with business-owned property. Typically, a BOP is purchased with other policies, such as workers' compensation or business auto.
A business owner's policy covers two primary coverages:
General Liability - The BOP delivers liability coverages equivalent to a general liability policy. These include protection from liability to third parties for bodily injuries, property damage, advertising injury, and product-related litigation.
A BOP does not cover you or your employees. A separate workers' compensation policy will be necessary to provide coverage to them.
Commercial Property - This insurance protects your business property used to conduct business: your office furniture, equipment used in the shop, fixtures, inventory, and business income protection. Coverage is limited to the contents of your primary business location. If you have mobile property or equipment used away from your location, your business will need Inland Marine Insurance.
Similar to all policies, BOP policies have exclusions you should know. If you need coverage for something that isn't covered, policy endorsements may be available to you to extend coverage.
Business property policies do not include coverage for flood or earthquake. These perils are insured on separate policies.
Commercial Auto Insurance
Business Auto insurance will meet the statutory auto insurance requirements in your state and offer increased liability limits for bodily injury or property damage caused by the negligence of the company driver in causing an accident. Personal insurance policies usually don't cover vehicles used for business purposes.
Businesses that own vehicles should take a differentiated coverage strategy because they are vulnerable to higher risks than personal vehicles. Commercial auto insurance coverage is not confined to semis or dump trucks; it is likewise available for companies that need to carry tools to job sites, run errands, deliver products or transport customers.
Workers Compensation Insurance
Employers in Tennessee with five or more employees must have workers' comp insurance. Workers' compensation insurance covers the costs of medical care for employees for occupational injuries and illnesses. Lost wages incurred due to recovery from a work injury are also paid to the employee.
Workmans’ compensation insurance will pay benefits to an employee's family for an employee's death. Workers' compensation insurance covers injuries at work, regardless of cause, in events such as these:
- A kitchen worker at a restaurant burns his hands while preparing food for customers. After the incident, he requires many weeks to recover.
- An employee lifted a couple of boxes and injured her lower back. As a result, she required x-rays, medication, and physical therapy after an emergency room visit.
- An employee on a client appointment is injured in a car accident when returning to the office, necessitating an emergency room visit.
Professional Liability Insurance
Businesses specializing in professional services in Tennessee should cover their operations with this coverage. Professional liability protects businesses that face professional negligence allegations and provides the insured with legal representation to defend against the allegations of financial damages. It is also often known as Errors & Omissions (E&O). Professional liability insurance covers professionals who provide services, such as attorneys, consultants, and accountants.
Consultants who provide advice will often need professional liability insurance because their services can cause financial losses or indirect financial damage to their clients. Professional liability is excluded from most all corporate general liability insurance policies. For example, a customer alleges that an accountant filed their taxes incorrectly and caused them to lose $10,000 in the refund. The accountant's professional liability insurance may respond to the allegations with legal defense and cover the settlement for covered claims.
Many professional liability policies are written on a claims-made basis, which means that coverage for claims made during the policy period is granted back to the retroactive date of professional liability coverage. A retroactive date may be included to cover incidents before a policy's coverage starts. Note that it gets tricky, though, if you change policy types from claims-made to occurrence, you will need tail coverage.
Professional liability insurance coverage can protect your current business and future sales against legal action arising from services you've provided previously and for other functions performed around the globe as long as the suit is filed in the US, its territories, and Canada.
This coverage protects your company from cyber crimes like data breaches. Other cybercriminal activities, such as malware attacks, phishing, social engineering, and ransomware, may also be covered. This protection extends to services like data recovery and legal liability costs. Businesses that manage or store their customers' personal information, like credit card details, need this protection.
An accountant or professional handling third-party confidential electronic data should purchase cyber insurance. This insurance coverage is also known as cybersecurity or cyber risk insurance.
As more businesses utilize and store digital data, the need for cyber insurance has expanded to include more than just the healthcare and banking industries. Cyber attackers often target small to medium-sized businesses due to their need for proper security safety measures.
Tennessee Small Business Insurance Requirements
State laws impact which business insurance coverage you require. They're required everywhere in Tennessee, from Knoxville to Chattanooga.
Workers' compensation insurance - Businesses with five or more employees, full-time or part-time, in Tennessee are legally required to have workers' compensation insurance coverage. Corporate officials are included in the headcount even if your insurance plan doesn't cover them. Each construction project or coal-mining company must carry workers' compensation insurance, regardless of the number of employees.
Workers' compensation covers medical treatments and rehabilitation costs from work-related injuries and illnesses and wage replacement benefits if unable to work due to the injury.
Commercial auto insurance - Every licensed motor vehicle in the state of Tennessee is required to have auto insurance. This coverage pays for damages resulting from accidents involving work vehicles.
Tennessee's minimum limits for auto liability insurance are:
- $25,000 bodily injury liability per person
- $50,000 bodily injury liability per accident
- $15,000 property damage liability per accident
Trucking companies typically need limits of $750,000 if they do interstate trucking routes.
If your employees use their vehicles for business-related purposes, you will want to include Employers’ Non-Owned Auto Liability on your business auto policy. This will protect the business from liability claims due to the employee getting in an at-fault accident while driving for the company’s business. The employee’s policy would be primary, but damages in excess could be picked up by this coverage.
Cost of Business Insurance in Tennessee
The insurance cost in Tennessee is determined by several factors, including a business's location, revenue size, assets insured, and coverage needs. For example, a company in Nashville will have a different premium for general liability than one located in Chattanooga, or a business with employees will generally cost more than one that does not have employees.
The industry in which you work is the most critical factor. Each industry has its risks. Thus, their insurance premiums differ. In high-risk occupations, such as tree trimmers and roofers, workers’ compensation rates are much higher than a clerical employee.
In Tennessee, very small businesses spend around $45 monthly on general liability insurance.
Get a Quote for Tennessee Business Insurance
Please visit us at InsuranceAdvisor.com to get a quote for your business in Tennessee. Choose your state, then choose from General Liability, Commercial Property, Business Auto, and Workers’ Compensation insurance to answer the application questions. We have workers’ compensation quoting in real time! Once we receive your request, we will provide you with a proposal for your coverage as quickly as possible.
Why Choose Insurance Advisor for Commercial Insurance in Tennessee?
InsuranceAdvisor.com can provide quotes for General Liability, Business Owners’ Policies, Commercial Property, Workers' Compensation, Business Auto, and Umbrella Insurance in Tennessee with many different insurance carriers. No need to drive to an agent’s office, you can request quotes from the comfort of your home, office, or anywhere by visiting us at InsuranceAdvisor.com.
Once you create your account at InsurnceAdvisor.com, your Tennessee business information is stored, and you can come back at any time to request quotes for other lines of business insurance, get a certificate of insurance, make changes to your business details, and learn about different types of commercial insurance that your business may need.
Frequently Asked Questions (FAQ) about Tennessee Insurance
1. How much is business insurance in Tennessee?
Small Tennessee companies pay about $45 each month for general liability insurance coverage.
However, how much your business will pay varies based on factors such as:
- Your business's exposure to liability claims.
- What types of insurance coverage are purchased.
- Limits required.
- The likelihood of your employees getting hurt.
- Amount of annual revenue and payroll.
2. Where can I get inexpensive business insurance in Tennessee?
Tennessee business insurance is affordable. If you want broader coverage, meaning more losses are covered, that translates to paying a little more premium. Business insurance policies are customizable, if you feel a lower limit of liability is good enough for your business, then that is what you should purchase.
Shopping Tennessee business insurance from the same or different agents is recommended to see how one insurance company’s rates compare to another’s. Insurance carriers have different rates because each insurance company’s experience (premium vs. losses) in a particular industry for a line of coverage will differ. That means the premiums charged will also vary among various insurers.
At InsuranceAdvisor.com, we can check premiums with several different carriers, depending on your business’s characteristics.
Always read the exclusions in the policy. If the main thing that keeps you up at night is excluded, how satisfied will you be with saving a couple of bucks? Get an affordable option with the most likely occurrences to happen to your business insured and not listed under exclusions. “You get what you pay for” is true with all types of insurance.
3. What types of business insurance are required for businesses in Tennessee?
As a Tennessee small business owner, you should explore different types of insurance to protect your company's finances and legal interests.
The following are the essential business insurance policies recommended for small business companies:
- General Liability Insurance
- Professional Liability Insurance
- Business Owners Policy
- Cyber Liability Insurance
- Workers Compensation
- Commercial Auto Insurance
- Employment Practices Liability
- Directors & Officers Liability
4. Which insurance companies are best in Tennessee?
An experienced, licensed Tennessee commercial insurance agent will find the insurance companies that are best for your business industry. Insurance companies often specialize in specific business segments, and these may vary from state to state. An independent commercial insurance agent matches your business with carriers that know your industry and its insurance requirements. Visit us at InsuranceAdvisor.com to request a quote for Tennessee General Liability, Workers’ Compensation, Business Property, Business Auto, or Umbrella insurance.
5. How to find out if a business has liability insurance in Tennessee?
Request your vendor or product supplier send you a copy of their general liability insurance certificate. Your business should keep certificates of insurance on file for all contractors, service providers, and product distributors.
The Certificate of Insurance shows the policy number, insurance company, and agency’s contact information. If still in doubt, you can call the agency to verify the coverage shown on the certificate.
Remember, a certificate is only a snapshot of the insurance carried at that moment. For instance, if your vendor doesn’t make the next installment, the vendor’s insurance may be canceled for non-payment or not renewed. It’s recommended to get certificates updated at every renewal of your vendor’s insurance. If their insurance renews in January, request a renewal certificate a month or so before.
6. What is the cost of essential business liability insurance in Tennessee?
General liability insurance is generally inexpensive, based on a survey of 50,000 small business owners. We also determined that 95% of the businesses we surveyed pay less than $50 per month for essential general liability insurance and that one business pays more than that monthly threshold.